Yesterday evening, I posted an article about the purchase price for Nuts.com, which was revealed in an Inc. magazine article. This morning, the easier to read version of the article, “Stalking That Dream .Com: True Tales From The Front Lines of the URL Wars,” was published online.
There are several takeaways from the article that might interest you and will perhaps benefit your business. From an interest standpoint, the acquisitions of Mint.com, Nuts.com, Hired.com, and several other domain names are discussed. The buyers of these domain names discuss the prices they paid, and there is some insight shared about the value the domain names brought to the companies that bought them as well as the benefits realized by owning the domain names.
From a business standpoint, the article discusses the negotiations the buyers had with the sellers, and that may be helpful information for domain investors. Many negotiations seem like a cat and mouse game, with the domain name owner trying to uncover as much information about the buyer as possible, and the buyer trying to be as covert as possible. It was interesting to read how far some people go to track down a domain owner to try and buy a domain name.
For me, the key takeaway is that every domain name inquiry should be treated as if it is a “real” buyer. My pricing is not really based on who is inquiring about a domain name, but it has more to do with my perception of the market value and replacement value of the domain name. I always assume that a prospective buyer is not who he says he is unless I can verify with certainty that it is.
Many prospective buyers try to be covert when they are negotiating to buy a domain name, and this article seems to reinforce the idea that this is the way to go. Domain investors should keep this in mind when they receive their next $100 offer from a student needing the domain name for a school project.
The article states that 4 letter .coms have been extinct since 2013, more like mid 2007 if I remember correctly.
Great article though, thanks for sharing.
>”My pricing is not really based on who is inquiring about a domain name, but it has more to do with my perception of the market value and replacement value of the domain name”
Same here. The buy inquiries through brokers are particularly annoying in terms of blatant “covertness,” but it did result in a decent sale not long ago and a near miss just recently which could still bear fruit.
The bottom line is that you should price a domain based on what you honestly think it’s worth or the range between what you honestly want to let it go for and what you think you can get in negotiation if less than what you think it’s really worth, because on the Internet every one knows you’re a dog hiding behind a broker or a free email account when you are trying to buy it.
That applies for a straight cash sale of course. Negotiation about equity stake would change the equation I guess, though I’ve never sold one with that yet.
This article seems to encourage this cat and mouse game, as if domainers are completely clueless and don’t know this is going on. Yes, you got us! We’ve never hear that line before.
Most people don’t like to play these sort of games or have people try to play one on them. I think a better approach would be to hire or work with a domain consultant with experience just like you would if you were buying a home, business, luxury car, yacht, or other high dollar item.
I’d like to see an article on entrepreneurs who were burned playing games like this, but I’m sure few would admit it.
@ Adam, I (of course) agree that many business owners would be better off hiring a Domain Buyer Broker to help them acquire the domain name they covet. Some buyers, sadly, need to experience being “burned” first before they realize certain things are (or should have been) handled by experts. On a brighter note, people that have learned their lesson the hard way are way more appreciative of the value a Domain Buyer Broker like me brings to the table. They’ve been there, done that, and have the scars to prove it!
Have you seen what I’ve posted before about times when a seller wants an equity stake in addition to any cash? There would have to be disclosure of who and what the buyer is ahead of time for that, and brokers would have to modify how they do business.
@ John, you raise a very valid point however in my experience brokering hundreds of domain acquisition deals I’ve rarely encountered a seller wanting equity in the buyer’s business (or a buyer wanting to do a deal like that). 99% of the time the seller is only interested in good old fashioned cash. Not saying an equity deal can’t or doesn’t happen, but I suspect it’s a real exception to the rule.
This just in:
“Companies are movin’ on up to .com domain names
More businesses are investing in the tried-and-true .com after seeing their efforts with new domain names fall flat.”
“Why .com is still the domain of choice for businesses”
On counterpoint, check this one out, too:
“How to Get the Best URL for Your Business–Without Paying a Fortune”
Especially read the part about “BeautyKind.”
What does this article tell you? That .US is where it’s at among alternatives. (See brief discussion of this not that long ago on Rick’s blog.)
P.S. In special limited specific cases, the .US also does outrank the .com. 😉